[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR906.15]

[Page 354]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 906--SECTION 5(h) HOMEOWNERSHIP PROGRAM (Eff. until 4-10-03)--Table of Contents
 
Sec. 906.15  Use of sale proceeds.

    (a) General authority for use. Sale proceeds may, after provision 
for sale and administrative costs that are necessary and reasonable for 
carrying out the homeownership plan, be retained by the PHA and used for 
housing assistance to low-income families (as such families are defined 
under the Act). The term ``sale proceeds'' includes all payments made by 
purchasers for credit to the purchase price (e.g., earnest money, 
downpayments, payments out of the proceeds of mortgage loans, and 
principal and interest payments under purchase-money mortgages), along 
with any amounts payable upon resale under Sec. 906.14, and interest 
earned on all such receipts. (Residual receipts, as defined in the ACC, 
shall not be treated as sale proceeds.)
    (b) Permissible uses. Sale proceeds may be used for any one or more 
of the following forms of housing assistance for low-income families, at 
the discretion of the PHA and as stated in the HUD-approved 
homeownership plan:
    (1) In connection with the homeownership plan from which the funds 
are derived, for purposes that are justified to ensure the success of 
the plan and to protect the interests of the homeowners, the PHA and any 
other entity with responsibility for carrying out the plan. Nonexclusive 
examples include nonroutine maintenance reserves under Sec. 906.11; a 
reserve for loans to homeowners to prevent or cure default or for other 
emergency housing needs; a reserve for any contingent liabilities of the 
PHA under the homeownership plan (such as PHA guaranty of mortgage 
loans); and a reserve for PHA repurchase, repair and resale of homes in 
the event of defaults.
    (2) In connection with another HUD-approved homeownership plan under 
this part, for assistance to purchasers and for reasonable planning and 
implementation costs.
    (3) In connection with a State or local homeownership program for 
low-income families, as described in the homeownership plan, for 
assistance to purchasers and for reasonable planning and implementation 
costs. Under such programs, sales proceeds may be used to construct or 
acquire additional dwellings for sale to low-income families, or to 
assist such families in purchasing other dwellings from public or 
private owners.
    (4) In connection with the PHA's other public housing that remains 
under ACC, for any purposes authorized for the use of operating funds 
under the ACC and applicable provisions of the Act and Federal 
regulations, as included in the HUD-approved operating budgets. Examples 
include maintenance and modernization, augmentation of operating 
reserves, protective services, and resident services. Such use shall not 
result in the reduction of the operating subsidy otherwise payable to 
the PHA under 24 CFR part 990.
    (5) In connection with any other type of Federal, State, or local 
housing program for low-income families, as described in the 
homeownership plan.